Reward management

Reward management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization.

Reward management consists of analysing and controlling employee remuneration, compensation and all of the other benefits for the employees. Reward management aims to create and efficiently operate a reward structure for an organisation. Reward structure usually consists of pay policy and practices, salary and payroll administration, total reward, minimum wage, executive pay and team reward.

Objective

Reward management deals with processes, policies and strategies which are required to guarantee that the contribution of employees to the business is recognized by all means. Objective of reward management is to reward employees fairly, equitably and consistently in correlation to the value of these individuals to the organization. Reward systems exist in order to motivate employees to work towards achieving strategic goals which are set by entities as well as aligning the actions of employees to reflect the culture, aims and beliefs a business or organisation wishes to uphold. Reward management is not only concerned with pay and employee benefits. It is equally concerned with non-financial rewards such as recognition, training, development and increased job responsibility. Ultimately, Reward Management is a tool that uses various types of Employee Motivation to align the strategic and cultural goals of an employee, or group of employees, with the tactical targets set by a business or organisation.

Rewards

Rewards are more about incentives to your employee’s work. It’s just to motivate them towards the work and promote productivity. To encourage more quality work, you offer them rewards.

Benefits

Benefits are most often not built into one’s salary; for example health insurance offered by the company.

Perks

Perks act as a kind of treat to the employees. It is offered to make their work-life more enjoyable and stable. This could be anything like; Chill Fridays, less-stressful Mondays, and so on.

Stock options

Some organizations offer stocks to their employees at a fixed rate for some time. This is again a great way to motivate employees to stick with the organization in the long term.

Recognition programs

Most of the employees would prefer financial rewards for their efforts towards the company. However, some employees seek recognition for their hard work from the organization.

Important:

Mutually beneficial: A reward system is beneficial not only to the employee but also to the organisation. The employee will feel more motivated to work harder by having a reward system in place the employee will feel more committed to their work and their productivity will increase. An increase in productivity will then benefit the organisation. Therefore, a reward system is mutually beneficial to the employee and the organisation.

Absenteeism: A reward system will reduce absenteeism in the organisation. Employees like being rewarded for a job well done and if there is a reward system in place, employees will be less likely to be ringing in sick and not showing up for work. Also, by having a reward system in place the employees will be clearer about the targets and goals of the organisation as they will be rewarded when reach certain targets. So, by having a reward system as an incentive they will be less likely to be absent from work.

Motivation: A reward system will motivate employees by reaching targets and organisational goals in exchange for rewards. A reward system is great at motivating employees but they will also be motivated to prove themselves to the organisation.

Loyalty: A reward system will increase the employee’s loyalty to the organisation. By a reward system being in place the employee feels valued by the organisation and knows that their opinion matters. If an employee is happy with the reward system, they are more likely to appreciate work place and remain loyal to the organisation

Teamwork: The reward system will increase the teamwork spirit in the organisation. The reward system will promote teamwork to the employees. The employees will work together as part of a team to achieve their targets in return for rewards. Teamwork within the organisation will help increase efficiency and create a happier workplace. This is another reason why reward systems are important in business organisations.

Morale: Having a reward system in place providing employees with incentives and recognition will boost their morale. By encouraging employees to meet goals and targets it gives them clear focus and purpose which will their morale. By the employees morale being boosted this will increase the morale of the entire organisation. This is all down to a reward system in the organisation.